This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this current report and unless otherwise indicated, the terms “we”, “us”, “our” and "Caro" mean Caro Holding Inc., unless otherwise indicated.
General Overview
Our company was incorporated on March 29, 2016 in the State of Nevada.
We are engaged in the subscription box business with our initial focus on offering sock subscriptions to our customers. Our subscription box will be a package of a pair of socks that will be sent directly to a customer on a recurring basis. For example, a potential subscriber will subscribe to receive a pair of socks once a month for either a period of 6 months or 12 months. Our subscription sock boxes are a marketing strategy and a method of product distribution, allowing us to target a wide range of customers and cater to their variety of specific needs and interests.
We are a small early stage company. To date, our company's activities have been limited to the sourcing of our advertising channels, initial branding efforts, and in our formation and the raising of equity capital.
We have not generated revenues and have limited cash on hand. We have sustained losses since inception and have relied upon loans from directors and officers and the sale of our securities for funding. We have never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.
Our Current Business
A subscription box is a package of retail products sent directly to a customer on a recurring basis. Subscription boxes are a marketing strategy and a method of product distribution. Subscription boxes are used by subscription based ecommerce businesses, referred to as "subcom" for short, which follow a subscription business model. The subcom aims to target a wide range of customers and cater to a variety of specific needs and interests. The subscription box industry is nascent, so there exists minimal data. It is estimated that there are 400 to 600 different kinds of subscription boxes in the United States alone and more overseas.1 Subscriptions vary in both cost and frequency, making them more accessible to a greater range of customers with different socioeconomic backgrounds. Subscription boxes tend to range from $10 to $100.2 The use of subscription boxes are rising in popularity among both consumers and businesses. Subscription commerce is suitable for a wide range of markets.3 Large scale retailers like Walmart, Amazon.com, CVS Pharmacy, Freshpair, and Lancôme use subscription commerce. Small scale, local groups also utilize subscription boxes. Products are limited only to what can be shipped and downloaded. Despite this, some products, such as smaller and lighter products, are better suited for subscription boxes than others.4
We have developed our preliminary website, www.caroholdings.com, and are in the process of developing a more advanced site where we can provide more detailed information regarding our products and shopping cart. This will cost us around $15,000. We intend to source this work to third party consultants and this project will be spearheaded by our officer and director. Our website is currently being completed.
Principal Products or Services and their Markets
We offer subscription box products through our website, www.caroholdings.com. Our current box subscription is the delivery of socks. Customers have the ability to sign up for monthly sock delivery with three options:
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1. | Caro Sock Giftbox, for delivery of 2 pairs of socks monthly; |
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2. | Caro Singles, for delivery of 3 pairs of socks monthly; or |
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3. | Caro Family, for delivery of up to 16 pairs of socks monthly. |
A Caro sock subscription features a unique selection of socks for any occasion whether it be for Work, for Play, and for Fun. Our awe-inspiring socks are made for comfort and are made from the high quality blends.
From our website, customers enter their subscription type, name, email address and telephone number. We then create an account for the customer and verify their address and allow them to select their first shipment of socks. Should a customer not be satisfied with their socks, they can return them and we will replace them with a new pair.
Inventory
The Company does not currently have any inventory on hand.
Distribution Methods of Our Products
We distribute our products via our website at www.caroholdings.com. Through our website, customers have the ability to sign up for monthly sock delivery, on a month-to-month subscription or by prepaid subscription.
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1 Jayakumar, A. (2014, April 7). Little-box retailing: Subscription services offer new possibilities to consumers, major outlets. Retrieved November 30, 2014, from http://www.washingtonpost.com/business/economy/tktktktk/2014/04/07/f68135b6-a92b-11e3-8d62-419db477a0e6_story.html
2 Hutt, K. (2014, April 8). Subscription Boxes Can Feel Like Christmas, But Are They Worth It? Retrieved November 30, 2014, from http://www.bbb.org/blog/2014/04/subscription-boxes-can-feel-like-christmas-but-are-they-worth-it/
3 Hayes, M. (2014, May 16). Subscription Boxes: Are They Worth The Money? Retrieved November 25, 2014, from http://www.forbes.com/sites/learnvest/2014/05/16/subscription-boxes-are-they-worth-the-money
4 Alvo, Greg. "5 Steps to a Successful Convenience Commerce Model". Multichannel Merchant. Access Intelligence. Retrieved 21 October 2014.
Status of Any Publicly Announced New Product or Service.
We have not developed any new or unique products or services that have not already been announced.
Sources and Availability of Raw Materials
We do not currently have any commitments or arrangements to purchase merchandise from any supplier, and there are many vendors who can supply our merchandise.
Buying
Our buying responsibilities will be to identifying evolving fashion trends and developing themes to guide our merchandising strategy. We will develop fashion themes and strategies by identifying trends and assessing how they best apply to our target customer, shopping appropriate domestic and international markets, using fashion services, and gathering references from industry publications. We then plan on working closely with vendors to use colors, materials, and designs that create images consistent with the themes for our product offerings.
Marketing, Advertising, and Promotion
We believe that our brand will become one of our most important assets. Our ability to successfully create brand awareness is dependent upon our ability to address the changing needs and priorities of each brand's target customers. To that end, we plan to focus many of our marketing efforts to better understand our customers and their needs and ensure we align our brand messages in our marketing, and the channels through which we deliver these messages, to our target customers. We intend to implement marketing strategies to build upon loyalty programs, with our e-commerce customer relationship management efforts.
Building Brand Awareness
Our goal is to communicate a consistent brand image across all aspects of our operations. We will utilize a blend of advertising mediums and marketing methods to communicate who we are and the values we offer. Special emphasis is made to highlight brands as well as specific styles of product. The use of social media will become an increasingly important medium in our digital marketing efforts, allowing us to directly communicate with, as well as advertise to, our core customers.
Seasonality
Our quarterly results of operations have fluctuated, and are expected to continue to fluctuate in the future, primarily as a result of seasonal variances and the timing of sales and costs associated with opening new stores. Non-capital expenditures, such as advertising and payroll, incurred prior to the opening of a new store are charged to expense as incurred. Therefore, our results of operations may be adversely affected in any quarter in which we incur pre-opening expenses related to the opening of new stores.
We have three distinct peak selling periods: Easter, back-to-school and Christmas. To prepare for our peak shopping seasons, we must order and keep in stock significantly more merchandise than we would carry during other parts of the year. Any unanticipated decrease in demand for our products during these peak shopping seasons could require us to sell excess inventory at a substantial markdown, which could reduce our net sales and gross margins and negatively affect our profitability. Our operating results depend significantly upon the sales generated during these periods.
Dependence on Limited Customers
We are not dependent upon any specific customers at this time.
Our Competition
The retail footwear business is highly competitive. We believe the principal competitive factors in our industry are merchandise selection, price, fashion, quality, location, shopping environment and service. We compete with department stores, shoe stores, sporting goods stores, online retailers and mass merchandisers. Our specific competitors vary from market to market. We compete with most department stores and traditional shoe stores by offering competitive prices. We compete with off-price retailers, mass merchandisers and discount stores by offering a wider and deeper selection of merchandise.
Many of our competitors are significantly larger and have substantially greater resources. However, we believe that our online format, in combination with our wide merchandise selection, competitive prices and low operating costs, will enable us to compete effectively.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts
We do not own, either legally or beneficially, any patent or trademark.
Need for Government Approval of Principal Products or Services
None of the services we offer require specific government approval. Local government rules may dictate the need for a business license.
Research and Development during Our Last Two Fiscal Years
We have not in the past two years conducted any research and development activities, other than the development of our website. We do not anticipate conducting such activities in the near future.
Government Regulation
We are subject to general business regulations and laws, as well as regulations and laws specifically governing the Internet and e-commerce. Existing and future laws and regulations may impede the growth of our Internet or e-commerce services. These regulations and laws may cover taxation, privacy, data protection, pricing, content, copyrights, distribution, mobile communications, electronic contracts and other communications, consumer protection, the provision of e-commerce payment services, unencumbered Internet communications, consumer protection, the provision of e-commerce payment services, unencumbered Internet access to our services, the design and operation of websites and the characteristics and quality of products and services. It is not clear how certain existing laws governing issues such as property ownership, libel and personal privacy apply to the Internet and e-commerce. Unfavorable regulations and laws could diminish the demand for our products and services and increase our costs of doing business.
In addition, we may be subject to international trade agreements, such as the North American Free Trade Agreement and the activities and regulations of the World Trade Organization. We believe that we are in conformity with all applicable laws in the United States and the Philippines.
While we believe that our operations are in compliance with all applicable regulations, there can be no assurances that from time to time unintentional violations of such regulations will not occur.
Cost and Effects of Compliance with Environmental Laws
Compliance with federal, state and local provisions regulating the discharge of material into the environment or otherwise relating to the protection of the environment has not had a material effect upon our capital expenditures, earnings or competitive position. We believe the nature of our operations have little, if any, environmental impact. We therefore anticipate no material capital expenditures for environmental control facilities for our current fiscal year or for the near future.
Our Employees
We have no employees. Our sole officer and director furnishes her time to the development of our company at no cost. We do not foresee hiring any employees in the near future. We will engage independent contractors to help design and develop our website and marketing efforts.
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Our principal business and corporate address is 28th Floor Cityland Pasong Tamo Tower U2807, 2210 Chino Roces Avenue (Pasong Tamo), Makati City, Philippines 1230; our telephone number is +632-893-8909. Our facilities are provided for approximately $15 per month. We have no intention of finding, in the near future, other facilities during our development stage.
We do not, currently, have any investments or interests in any real estate, nor do we have investments or an interest in any real estate mortgages or securities of persons engaged in real estate activities.
Our common stock is not yet quoted on any markets or exchanges.
Our shares are issued in registered form. ClearTrust, LLC, 16540 Pointe Village Drive, Suite 210, Lutz, Florida 33558 (Telephone: (813) 235-4490; Facsimile: (813) 388-4549) is the registrar and transfer agent for our common shares.
On June 23, 2017, the shareholders’ list showed 39 registered shareholders with 7,705,000 shares of common stock outstanding.
Dividend Policy
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where after giving effect to the distribution of the dividend:
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1. | we would not be able to pay our debts as they become due in the usual course of business, or; |
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2. | our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution. |
We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.
Equity Compensation Plan Information
Not applicable
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report.
Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
The following summary of our results of operations should be read in conjunction with our financial statements for the year ended March 31, 2017, which are included herein.
Our operating results for the year ended March 31, 2017, for the period from inception (March 29, 2016) to March 31, 2016 and the changes between those periods for the respective items are summarized as follows:
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For the Year Ended March 31, 2017 |
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For the Period From Inception (March 29, 2016) to March 31, 2016 |
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Increase (Decrease) |
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Revenue |
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$ |
Nil |
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$ |
Nil |
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$ | - |
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General and administrative expenses |
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23,304 |
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7,075 |
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16,229 |
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Net loss |
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$ | (23,304 | ) |
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$ | (7,075 | ) |
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$ | (16,229 | ) |